Immigrant Investors and Cannabis Business Opportunities in the United States

• Publication year: 2019
• Author: William Tolin Gay*

IMMIGRANT INVESTORS AND CANNABIS BUSINESS OPPORTUNITIES IN THE UNITED STATES

William Tolin Gay*

I. INTRODUCTION

The current trend toward state legalization of cannabis has created business opportunities that are attractive to many investors. However, cannabis remains illegal under federal law. Foreigners who invest in the industry could be refused entry into the United States, have their visas revoked, or face deportation. This article discusses the visa options available to foreign investors, the nature of cannabis and the industry that legalization has spawned,¹ the legal climate at the federal and state levels, and the current posture of the United States Citizenship and Immigration Services (USCIS) and United States Customs and Border Protection (CBP) on these issues.

II. FOREIGN INVESTOR VISAS

Foreign investors who wish to enter the United States have choices, depending on their immigration and investment intentions. Here is a sample of what may be available:

EB-5 - A foreigner who invests $1,000,000 and creates 10 qualifying jobs can obtain a green card. This visa classification has received a great deal of attention in recent years, due to its explosion in popularity among Chinese investors.²
EB-1C — A foreigner who is a multi-national executive or manager may qualify for an employment-based, first-preference visa.³ Under this classification, the applicant must have been employed in a managerial or executive capacity outside the United States in the three years preceding the application for at least one year by a firm or corporation, and the applicant must be seeking to enter the United States to continue working for the same organization (or its affiliate or subsidiary).
E-1 — A national of a country with which the United States maintains a treaty of commerce and navigation may apply for a visa to be admitted to the United States to engage in international trade on his or her own behalf. Some employees of such a person or qualifying organization may also be eligible for this classification.⁴
E-2 — In similar fashion, a national of a country with which the United States maintains a treaty of commerce and navigation may apply for a visa when investing a substantial amount of capital in a United States business.⁵

The first of these is an immigrant visa, while the second is dual intent (meaning the visa allows a foreigner to be temporarily present in the United States with both lawful status and immigrant intent): these types of visa can lead to permanent residence. The latter two are non-immigrant visas, which terminate upon the cessation of the trading activity or liquidation of the investment, respectively.

III. CANNABIS—THE PLANT

The cannabis family includes two major species: Cannabis Sativa (C. Sativa) and Cannabis Indica (C. Indica). In general, C. Sativa is tall, with a long flowering time, a low yield, and an energizing effect, whereas C. Indica is short, with a brief flowering time, a high yield, and a calming effect; however, these distinctions have recently become blurred due to selective breeding.⁶ Both species include varying levels of the three active compounds, described below.

THC, or delta-9 Tetrahydracannabinol, appears as THC acid in freshly harvested marijuana. THC acid is not psychoactive. The acid is removed by a process called decarboxylation, which involves removing a carbon dioxide molecule, and which is the reverse of the first step in photosynthesis. Decarboxylation can be achieved by either heating to approximately 200 degrees Fahrenheit for two to four hours, or by aging for a period that is generally a few weeks, depending on temperature, humidity, and other conditions.⁷ Smoking freshly harvested, unaged marijuana is essentially a form of rapid, albeit incomplete, decarboxylation.

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CBD, or cannabidiol, is nonpsychoactive and is the substance that is currently receiving the greatest amount of medical attention. It is derived from both cannabis and its near cousin hemp, and has been touted as having health benefits, including anti-seizure—parents of epileptic children have moved to states...